Next Generation Supply Management Defined

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Daily Archives: February 15, 2007

When I was in the Dallas area recently, I had the opportunity to sit down with Michael Zier of Austin Tetra and talk about what lies ahead for Austin-Tetra and how their recent acquisition by Equifax is going to help them to move forward.

Austin Tetra is a very interesting animal in the Supply Chain Space. Not only is it one of the few providers of Supplier Data Management Solutions that also comes with supplier data, one of fewer providers who understand that a credit-score is not a viability score, and maybe the only provider to focus on supply diversity solutions, but, unlike most companies in the space, it focuses on custom built vs. out-of-the-box solutions.

Austin Tetra recognizes that most companies that call on them already have data management, data analysis, and a host of supply chain and finance solutions in place and that their client’s goal is typically to understand how to identify the risk associated with a current or new potential supplier when the client is about to undertake a supply base rationalization or globalization effort, not necessarily to buy a new software solution. As such, they’ve spent a lot of time building integration solutions into many standard ERP, spend analysis, business intelligence, financial data stores, and sourcing platforms to allow you to get the data you need, where you need it, in the format you need it. After all, their primary value is in the data they provide and the proof is in the repeat business they get year after year.

I plan to write more about them and their solutions in the future, after I’ve had another chance to talk to Michael Zier and their Product Manager and drill more in depth into their capabilities, but the most interesting part of our conversation centered around credit risk scores. The reality is that although most credit bureau’s still tend to think that they are the greatest indicator of business sustainability, they totally miss the point in that a financial institution’s credit-worthiness and on-time payment scores have nothing to do with corporate sustainability. Just because a company has a low credit score, or is typically slow to pay, does not mean it is in any danger of ever going out of business. If you analyze these scores carefully, you’ll find that a lot of big, stable, household name companies have low scores. Why? Because they are so big, they can get away with paying on their schedule, when it’s good for them. If their suppliers want their business, they put up with it. The reason that this was the most interesting part of my conversation is that Austin Tetra is currently working with Equifax to do something about this. They are in the process of developing metrics much more appropriate to supplier stability and longevity. Their goal is to have a product offering later this year.

So keep an eye on them, and an eye on this blog, and besides more related posts in the future, maybe I’ll even manage to wrangle one of their internal writers to guest author a post on this blog as well. Who knows? …